Advice? Employer screwed up tax withholdings....

What is the name of your state? Wisconsin

Hello,

This past April, during tax season, I discovered that my employer has not been taking out the appropriate medicare and FICA tax deductions. After several weeks of going through various people in the HR/payroll department, I finally reached an individual who told me that for some reason someone in payroll accidently marked my account as exempt from those taxes.

Now from what I understand in order to be exempt, you must have some type of work visa on file for working outside the US. In the 7 years I've been with the company I've never worked outside the US. And in looking back at paycheck stubs, the first pay period that the taxes were not taken out, was the 1st pay period after moving from IL to WI.

I have never received any formal document from the company stating the issue, however the person I've been corresponding with in the HR department is telling me that the taxes for 05, from jan 1 to may 31st must be paid back within 3 pay periods and will automatically be taken out of my paycheck.

The total amount is 1778.76 and comes to just under $600 per paycheck that they will take. This creates an incredible financial burden on my part to meet my bills and living expenses. They refuse to work with me to pay it back in a timely manner that isn't as much a burden. They've already taken the first installment out of my last paycheck, still with no formal documentation from the company, just this payroll employee's personal emails.

I know they're just trying to correct their books as soon as possible, and cover their own mistake, and putting the financial burden on me to do so. This is a large consulting firm and I just don't know what my rights may be in a situation like this.

Rights? Nope, you really don't have any, although it would have been a good idea for the employer to have gotten your written authorization just for their records. Legally, however, the employer is not required to get written authorization to deduct taxes, so I really doubt you have any recourse here.

However, and excuse me for saying so, but I tend to have little sympathy for someone who either doesn't notice such a critical error on their paycheck, or notices it but doesn't reserve that money for when the employer attempts to recover it, then cries financial hardship when they do try to recover the funds.

They aren't trying to "cover" their mistake, necessarily. An error was made, you know it was made, and they are trying to fix it. The money should have been deducted and it wasn't. If you had put that money aside when you noticed the error (and you should have noticed, as you should be reviewing your paystubs every pay check), this wouldn't be a hardship for you now.

Sorry, but I've been in payroll and payroll management for 27 years, and I hear this all the time, so I'm getting more cynical and less understanding as time passes.

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You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.

Thanks patty for the quick response. Yes I agree with you that I should have been paying closer attention to the stubs, But I've been employed with this company for 7 years, with no reason to even suspect a change like this.

Don't get me wrong, I'm not trying to get out of paying the amount, I would just like them to work with me on paying it back in say 6 pay periods as apposed to 3, in order to make it not such a burden.

Well, good luck with that. They're probably trying to get it cleared up by the end of June for the filing of the quarterly employment tax return.

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You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.

bucky, the company has to pay the tax and report quarterly. They have to pay both the employee's and the employer's share, whether they collect the your portion from you or not. That may not be why the company is in such a hurry to collect this, but it could be.

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You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.

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